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It’s taken more than a decade so far but then this is what we do

Summary:
Boris Johnson might have been speaking more off the cuff than in a fully planned manner but this is good news:Boris Johnson says workers will not have to pay National Insurance until they earn £12,000 if the Conservatives are elected to power. Answering questions in Teesside, the prime minister promised his party would ensure "low tax for working people".The current threshold sees workers paying National Insurance contributions once they earn £8,628 a year.Mr Johnson had promised to raise the threshold to £12,500 during the Tory leadership contest.That pledge could see workers saving up to £465 a year.We started making this point back in 2008 as the living wage people started their campaign. The difference between the minimum wage then and the claimed living wage was entirely made up of

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Boris Johnson might have been speaking more off the cuff than in a fully planned manner but this is good news:

Boris Johnson says workers will not have to pay National Insurance until they earn £12,000 if the Conservatives are elected to power.

Answering questions in Teesside, the prime minister promised his party would ensure "low tax for working people".

The current threshold sees workers paying National Insurance contributions once they earn £8,628 a year.

Mr Johnson had promised to raise the threshold to £12,500 during the Tory leadership contest.

That pledge could see workers saving up to £465 a year.

We started making this point back in 2008 as the living wage people started their campaign. The difference between the minimum wage then and the claimed living wage was entirely made up of the tax that we charge to the incomes of poor people. The solution was and is, therefore, to charge less tax to those low incomes.

So far we have had partial success, the income tax allowance has more than doubled to £12,500. We have always said that this should be true of national insurance too. It looks like this is now going to happen.

And a success it is too. For if you want the working poor to have more money then stop taxing them so damn much.

This is also rather what we do. Madsen Pirie has described our job here as to be the voices howling nonsense out in the wilderness. Give it a decade and it’s the received wisdom and it all gets enacted.

However, we are not quite finished, shoulders back to the grindstone. One of the reasons we know this is our proposal is that the full year, full time, minimum wage was about £12,500 when we started our shouting at full volume. Our point being that if there is this irreducible minimum that someone should get paid then that’s why it shouldn’t be taxed. Because, you know, irreducible minimum. Now that said minimum is up at £16,000, people are talking about it moving to £18,000, then that’s what those allowances should be. Irreducible, just and righteous minimum, d’ye see?

Oh, and it should also apply to employers’ national insurance for, as we all know and agree, that is incident upon the workers’ wages.

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Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

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